By Jeff Ostrowski
The Palm Beach Post, Fla.
WWR Article Summary (tl;dr) Two Florida entrepreneurs share how they are surviving and making moves in the cutthroat beverage industry.
The Palm Beach Post, Fla.
A year after Five Organic climbed onto Publix shelves, the grown-in-Palm Beach County alternative to Gatorade already is beating long odds: The product is still alive.
“We’ve shown that the brand has legs,” says Nadav Haimberg, one of two Palm Beach County entrepreneurs who created Five Organic.
Haimberg and his partner, Kara Clapp, acknowledge that succeeding in the cutthroat beverage market is no easy task. But they’re making headway.
Publix, Florida’s largest grocer, carries Five Organic in most of its locations. A 16-ounce bottle costs $2.35.
And the product now is available in Amazon’s Whole Foods Market stores in Florida. Five Organic is prominently displayed at Whole Foods’ West Palm Beach location, where it’s priced at $2.29.
In another victory, Five Organic brought on as an investor Kevin Klock. The Seattle entrepreneur is the creator of Sparkling Ice, a product that found retail success.
Unlike Gatorade and Powerade, Five Organic uses no artificial dyes, no artificial flavors, no preservatives and no added sugar. The drink’s sweetness comes from organic stevia.
The five in the product’s name refers to the number of calories in an eight-ounce serving.
Klock says he was impressed that Five Organic’s formula tastes good without sugar. He also sees opportunity for a fresh product to compete with Gatorade, long the dominant brand in the category.
“Four or five years ago, I never would have considered a product in this space,” Klock said. “But we’re really starting to see millennials leave their parents’ brands.”
Not that Klock envisions Five Organic unseating PepsiCo’s Gatorade, by far the biggest player in the $9 billion sports-drink market. But Five Organic, which operates with no debt and little overhead, can succeed even if it’s not a blockbuster.
“The electrolyte category is big enough that a small chunk of that will be a big company,” Klock said.
Haimberg says 400 new beverage brands are introduced every year, meaning there’s no shortage of drinks vying for the attention of consumers and retailers.
“It takes a long time to build a brand people notice,” Haimberg said. “It’s really tough to fight through the clutter.”
The recent history of the beverage industry is littered with the carcasses of products that challenged Gatorade’s hegemony. Clif Quench, an all-natural drink marketed by the makers of Clif Bar, quickly disappeared after its 2009 launch.
Champion Lyte, a no-calorie sports drink made by a Boca Raton company, made a splash years ago. It hired former Miami Dolphins quarterback Jay Fiedler as a pitchman and landed a distribution deal with Palm Beach County schools. Even so, Champion Lyte evaporated from the drink market.
Not every sports drink has flopped, of course. Vitaminwater became a hit, and Coca-Cola took a stake in BodyArmor, which markets itself as a healthier alternative to Gatorade,
Convincing consumers to grab Five Organic from the supermarket shelf is just one challenge. Haimberg and Clapp also must persuade retailers to add a new product to their already-crowded lineups.
And because Five Organic isn’t an established brand and isn’t connected to a beverage giant like Coke or Pepsi, Haimberg must work to keep Five Organic on shelves.
“We have to sell the brand multiple times,” he said.
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Distributed by Tribune Content Agency, LLC.
